the Municipality Policy Name: Credit Control and Debt Collection Policy Status: Draft Policy Last Approved By: Council Date Approved: 25 May 2016 Credit Control and Debt Collection Policy
The Uthungulu District Municipality, acting under the authority of section 11, read in conjunction with section 98 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), hereby publishes Credit Control and Debt Collection Bylaws. TABLE OF CONTENTS Page no. CHAPTER 1: Definitions...5 1. Definitions...5 CHAPTER 2: Provision of municipal services to customers...10 Part 1: Application for Municipal Services...10 2. Application for services and agreements...10 3. Special agreements for municipal services...11 4. Change in purpose for which municipal services are used...12 5. Termination of agreement for municipal services...12 Part 2: Applicable Charges...12 6. Applicable charges for municipal services...12 7. Availability charges for municipal services...13 8. Subsidised services...13 9. Authority to recover additional costs and fees...14 Part 3: Payment...15 10. Payment of deposit...16 11. Methods for determining amounts due and payable...16 12. Payment for municipal services provided...17 13. Cash allocation...17 2
14. Full and final settlement of an account...18 15. Responsibility for amounts due and payable...18 16. Dishonoured payments and default on payment...19 17. Incentive schemes...19 18. Pay-points and approved agents...20 Part 4: Accounts...20 19. Accounts...20 20. Consolidated debt...20 Part 5: Queries, complaints and appeals...22 21. Queries or complaints in respect of an account...22 22. Appeals against finding of municipality or its authorised agent in respect of queries or complaints...22 Part 6: Agreement for the payment of arrears...23 23. Accounts 30 days in arrears...23 24. Agreements and arrangements with consumers in arrears...23 25. Acknowledgement of debt...24 26. Failure to honour agreements...24 27. Re-connection of services...25 28. Uthungulu District Municipality staff and councillors in arrears...25 29. Consent to judgement and offers to settle in terms of section 58 of the magistrates court act...26 30. Debt recovery using the pre- payment metering system...28 CHAPTER 3: Businesses who tender to the Municipality...29 31. Procurement policy and tender conditions...29 3
CHAPTER 4: Unauthorised services...30 32. Unauthorised services...30 33. Interference with infrastructure for the provision of municipal services...30 34. Obstruction of access to infrastructure for the provision of municipal services...30 35. Illegal re-connection...31 36. Immediate disconnection...31 CHAPTER 5: Offences...31 37. Offences...31 CHAPTER 6: Documentation...32 38. Signing of notices and documents...32 39. Notices and documents...32 40. Authentication of documents...33 41. Prima facie evidence...34 CHAPTER 8: Irrecoverable debts...34 42. Irrecoverable debts...34 43. Provision for doubtful debts...34 CHAPTER 7: General provisions...35 44. Power of entry and inspection...35 45. Exemption...36 46. Availability of bylaws...36 47. Conflict of law...36 48. Short title and commencement...36 49. Compliance and enforcement...36 4
50. Effective date...37 51. Policy adoption...37 CHAPTER 1: DEFINITIONS 1. DEFINITIONS For the purpose of these By-laws, any word or expression to which a meaning has been assigned in the Act shall bear the same meaning in these By-laws and unless the context indicates otherwise account means any account rendered for municipal services and district levies ; act means the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000 actual consumption means the measured consumption of any customer; applicable charges means the rate, charge, tariff, flat rate or subsidy determined by the District Municipality; average consumption means the average consumption of a customer of a municipal service during a specific period, which consumption is calculated by dividing that customer s total measured consumption of that municipal service over the preceding three months by three; agreement means the contractual relationship between the Municipality or its authorised agent and a customer, whether written, deemed or implied; area of supply means any area within or partly within the area of jurisdiction of the Municipality to which a municipal service or municipal services are provided; arrears means any amount due, owing and payable by a customer in respect of municipal services and or levies not paid on the due date; authorised agent means (a) any person authorised by the Municipal Council to perform any act, function or duty in terms of, or exercise any power under these By-laws; and/or 5
(b) (c) any person to whom the Municipal Council has delegated the performance of certain rights, duties and obligations in respect of providing revenue services; and/or any person appointed by the Municipal Council in terms of a written contract as a service provider to provide revenue services to customers on its behalf, to the extent authorised in such contract; commercial customer means any customer other than household and indigent customers, including without limitation, business, government and institutional customers; connection means the point at which a customer gains access to municipal services; customer means a person with whom the Municipality or its authorised agent has concluded an agreement for the provision of municipal services; levy payer means any person who is liable for the payment of the regional services levy or the regional establishment levy; defaulter means a customer who owes arrears; due date means the date on which the amount payable in respect of an account becomes due, owing and payable by the customer, which is determined by Council; emergency situation means any situation that if allowed to continue poses a risk or potential risk to the financial viability or sustainability of the Municipality or a specific municipal service; estimated consumption means the deemed consumption by a customer whose consumption is not measured during a specific period, which estimated consumption is rationally determined taking into account at least the consumption of municipal services for a specific level of service during a specific period in the area of supply of the Municipality or its authorised agent; household customer means a customer that occupies a dwelling, structure or property primarily for residential purposes; household means a traditional family unit consisting of a maximum of eight persons (being a combination of four persons over the age of eighteen and four persons eighteen years or younger); 6
illegal connection means a connection to any system through which municipal services are provided that is not authorised or approved by the Municipality or its authorised agent; tampering fee means a fee charged for the illegal connection, adjustment or bypassing of a consumption meter or the siphoning of a supply of electricity or water supply to an unmetered destination, for which a fee will be determined annually; reconnection fee means the fee charged for reconnection of electricity/water supply when the supply has been disconnected due to non-payment, for which the fee will be determined; variable flow-restrictor device means a device that is coupled to the water connection that allows the water supply to be restricted or closed; indigent customer means a household customer qualifying and registered with the Municipality as an indigent in accordance with these By-laws; Municipality means Uthungulu District Municipality Municipal Council means the Council of Municipal Manager means the Accounting Officer of the Municipality municipal services means for purposes of these By-laws, services provided by the Municipality or its authorised agent, including refuse disposal, water supply and sanitation, or any one of the above; occupier includes any person in actual occupation of the land or premises without regard to the title under which he occupies, and, in the case of premises sub-divided and let to lodgers or various tenants, shall include the person receiving the rent payable by the lodgers or tenants whether for his own account or as an agent for any person entitled thereto or interested therein; owner means (a) (b) the person in who from time to time is vested the legal title to premises; in a case where the person in whom the legal title to premises is vested is insolvent or deceased, or is under any form of legal disability whatsoever, the person in whom the administration and control of such premises is vested as 7
a curator, trustee, executor, administrator, judicial manager, liquidator or other legal representative; (c) (d) in any case where the Municipality or its authorised agent is unable to determine the identity of such person, a person who is entitled to the benefit of the use of such premises or a building or buildings thereon; in the case of premises for which a lease agreement of 30 years or longer has been entered into, the lessee thereof; (e) in relation to (i) (ii) a piece of land delineated on a sectional plan registered in terms of the Sectional Titles Act, 1986 (Act No. 95 of 1986), the developer or the body corporate in respect of the common property; or a section as defined in the Sectional Titles Act, 1986 (Act No. 95 of 1986), the person in whose name such section is registered under a sectional title deed and includes the lawfully appointed agent of such a person; or (f) a person occupying land under a register held by a tribal authority; person means any natural person, local government body or like authority, a company or close corporation incorporated under any law, a body of persons whether incorporated or not, a statutory body, public utility body, voluntary association or trust; public notice means publication in an appropriate medium that may include one or more of the following: (a) publication of a notice, in the official languages determined by the municipal council. (i) (ii) (iii) in the local newspaper or newspapers in the area of the Municipality; or in the newspaper or newspapers circulating in the area of the Municipality determined by the Municipal Council as a newspaper of record; or by means of radio broadcasts covering the area of the Municipality; or 8
(iv) displaying a notice at appropriate offices and pay-points of the Municipality or its authorised agent; or (b) communication with customers through public meetings and ward committee meetings; shared consumption means the consumption of a customer of a municipal service during a specific period, which consumption is calculated by dividing the total metered consumption of that municipal service within the supply zone within which a customer s premises is situated for the same period by the number of customers within that supply zone, during the same period; subsidised service means a municipal service which is provided to a customer at an applicable rate which is less than the cost of actually providing the service including services provided to customers at no cost; supply zone means an area, determined by the Municipality or its authorised agent, within which all customers are provided with services from the same bulk supply connection; and unauthorised services means receipt, use or consumption of any municipal service which is not in terms of an agreement, or authorised or approved by the Municipality or its authorised agent. 9
CHAPTER 2: PROVISION OF MUNICIPAL SERVICES TO CUSTOMERS OTHER THAN INDIGENT CUSTOMERS Part 1: Application for Municipal Services 2. APPLICATION FOR SERVICES AND AGREEMENTS 2.1. Debtor accounts will only be processed in the name of the property owner, 2.1. A customer who qualifies as an indigent customer must apply for services as set out in Councils approved Indigent policy. 2.2. A person who requires the provision of municipal services must, where possible enter into a written agreement with the Municipality, before the municipal service is rendered. 2.3. If at the commencement of these By-laws or at any other time, municipal services are provided and received and no written agreement exists in respect of such services, it shall be deemed that a) an agreement exists as from the date when such services were rendered for the first time; and b) the level of services provided to that customer is the level of services elected, until such time as the customer enters into an agreement. 2.4. The Municipality or its authorised agent must on application for the provision of municipal services inform the applicant of the then available levels of services and the then applicable tariffs and/or charges associated with each level of service. 2.5. The Municipality or its authorised agent is only obliged to provide a specific level of service requested if the service is currently being provided and if the Municipality or authorised agent has the resources and capacity to provide such level of service. 2.6. A customer may at any time apply to alter the level of services elected in terms of the agreement entered into, provided that such requested level of service is available and that any costs and expenditure associated with altering the level of services is paid by the customer. 10
2.7. An application for services submitted by a customer and approved by the Municipality or its authorised agent shall constitute an agreement between the Municipality or its authorised agent and the customer, and such agreement shall take effect on the date referred to or stipulated in such agreement. 2.8. In completing an application form for municipal services the Municipality or its authorised agent will ensure that the document and the process of interaction with the owner, customer or any other person making such an application are understood by that owner, customer or other person and advise him or her of the option to register as an indigent customer. 2.9. In the case of illiterate or similarly disadvantaged persons, the Municipality or its authorised agent must take reasonable steps to ensure that the person is aware of and understands the contents of the application form and shall assist him or her in completing such form. 2.10. Municipal services rendered to a customer are subject to the provisions of these Bylaws, any other applicable by-laws and the conditions contained in the agreement. 2.11. If the Municipality or its authorised agent a) refuses an application for the provision of municipal services or a specific service or level of service; or b) is unable to render such municipal services or a specific service or level of service on the date requested for such provision to commence; or c) is unable to render the municipal services or a specific service or level of service, the Municipality or its authorised agent must, within a reasonable time, inform the customer of such refusal and/or inability, the reasons therefore and, if applicable, when the Municipality or its authorised agent will be able to provide such municipal services or a specific service or level of service. 2.12. The application for the provision of municipal services shall be made prior to the date on which the services are required to be connected. 3. SPECIAL AGREEMENTS FOR MUNICIPAL SERVICES 11
3.1. The Municipality or its authorised agent may enter into a special agreement for the provision of municipal services with an applicant a) within the area of supply, if the services applied for necessitates the imposition of conditions not contained in the prescribed form or these Bylaws; and/or b) receiving subsidised services; and/or c) if the premises to receive such services are situated outside the area of supply, provided that the Municipality having jurisdiction over the premises has no objection to such special agreement. The obligation is on the customer to advise the Municipality having jurisdiction of such special agreement. 4. CHANGE IN PURPOSE FOR WHICH MUNICIPAL SERVICES ARE USED Where the purpose for or the extent to which any municipal service used is changed, the onus and obligation is on the customer to advise the Municipality or its authorised agent of such change and to enter into a new agreement with the Municipality or its authorised agent. 5. TERMINATION OF AGREEMENT FOR MUNICIPAL SERVICES 5.1. A customer may terminate an agreement for municipal services by giving at least twenty one (21) days written notice to the Municipality. 5.2. The Municipality may terminate an agreement for the municipal services by giving at least twenty one (21) days written notice to the customer wherea) Municipal services were not utilised for a consecutive six(6) months period and no arrangement to the satisfaction of the Municipality for the continuation of the agreement was made; b) The premises occupied or owned by a customer have been vacated and no arrangement for the continuation of the agreement was made. 5.3. A customer shall remain liable for all arrears and applicable charges payable in respect of municipal services provided notwithstanding the termination of the agreement for the municipal services in terms of paragraph 5.1 and 5.2. 12
Part 2: Applicable Charges 6. APPLICABLE CHARGES FOR MUNICIPAL SERVICES 6.1. All applicable charges payable in respect of municipal services, including but not limited to the payment of the connection charges, fixed charges or any additional charges or interest will be set by the Municipal Council in accordance with a) its rates and tariff policy; b) any bylaws in respect thereof; and c) any regulations in terms of national or provincial legislation. 6.2. Applicable charges may differ between different categories of customers, users of service, types and levels of services, quantities of services, infrastructure requirements and geographic areas. 6.3. Deferment for payment of service accounts can be granted to consumers in terms of Council s delegated powers and conditions approved in these By-laws. 6.4. The Municipality may consolidate any separate accounts of persons who are liable for payment to the Municipality and may credit all payments received from such a person to any service and order of preference as determined by Council from time to time in its credit control and debt collection by-law. 6.5. The Municipality will be entitled to limit or disconnect any Municipal Services due to non- payment. 7. AVAILABILITY CHARGES FOR MUNICIPAL SERVICES The Municipal Council may, in addition to the tariffs or charges prescribed for municipal services actually provided, levy a monthly fixed charge, annual fixed charge, availability charge or once-off fixed charge where municipal services are available, whether or not such services are consumed or not. 8. SUBSIDISED SERVICES 8.1. The Municipal Council may, from time to time, and in accordance with national policy, but subject to principles of sustainability and affordability, by public notice, implement subsidies for a basic level of municipal service. 13
8.2. The Municipal Council may, in implementing subsidies, differentiate between types of household customers, types and levels of services, quantities of services, geographical areas and socio-economic areas. 8.3. Public notice in terms of paragraph 8.1 must contain at least the following details applicable to a specific subsidy: a) the household customers who will benefit from the subsidy. b) the type, level and quantity of municipal service that will be subsidised. c) the area within which the subsidy will apply. d) the rate (indicating the level of subsidy). e) the method of implementing the subsidy. f) any special terms and conditions which will apply to the subsidy. 8.4. If a household customer s consumption or use of a municipal service is a) less than the subsidised service, the unused portion may not be accrued by the customer and will not entitle the customer to cash or a rebate in respect of the unused portion; or b) in excess of the subsidised service, the customer will be obliged to pay for such excess consumption at the applicable rate. 8.5. A subsidy implemented in terms of paragraph 8.1 may at any time, be withdrawn or altered in the sole discretion of the Municipal Council, after a) service of notice as contemplated in section 115 of the Act of on the person affected by the Council s intention to consider such withdrawal or alteration; and b) consideration by the Council of any comments or request received from the person affected. 8.6. Commercial customers may not qualify for subsidised services. 8.7. Subsidised services shall be funded from the portion of revenue raised nationally which is allocated to the Municipality and if such funding is insufficient the services may be funded from revenue raised through, fees and charges in respect of municipal services. 14
9. AUTHORITY TO RECOVER ADDITIONAL COSTS AND FEES. 9.1. The Municipality or its authorised agent has the authority to, notwithstanding the provisions of any other sections contained in these By-laws, recover any additional costs incurred in respect of implementing these By-laws against the account of the customer, including but not limited to a) all legal costs, including attorney and client costs, interest on arrears and collection commission incurred; ; and/or b) the average costs incurred relating to any action taken in demanding payment from the customer or reminding the customer, by means of telephone, fax, e- mail, letter or otherwise; and/or c) any costs due to use of an illegal connection or due to unauthorised services, including the tampering fee, but not limited thereto. Part 3: Payment 10. PAYMENT OF DEPOSIT 10.1. The Municipal Council may, from time to time, determine different deposits for different categories of customers, users of services, debtors, services and service standards, provided that the deposit will not be more than three times the monetary value of the most recent measured monthly charges of the premises for which an application is made, subject to a minimum deposit which will be determined by Council from time to time. 10.2. A customer must on application for the provision of municipal services and before the Municipality or its authorised agent will provide such services, pay a deposit, if the Municipal Council has determined a deposit. 10.3. The Municipality or its authorised agent may annually review a deposit paid in terms of paragraph 10.2 and in accordance with such review require that an additional amount be deposited by the customer where the deposit is less than the most recent deposit determined by the Municipal Council. 10.4. If a customer is in arrears, the Municipality or its authorised agent may require that the customer 15
a) pay a deposit if that customer was not previously required to pay a deposit; and/or b) pay an additional deposit where the deposit paid by that customer is less than the most recent deposit determined by the Municipal Council; and/or c) pay an additional deposit where the deposit has been used to set off any outstanding or arrears amounts on the customer's account. 10.5. Subject to the Municipality's exclusive discretion, the deposit shall not be regarded as being in payment or part payment of an account.. 10.6. No interest shall be payable by the Municipality or its authorised agent on any deposit held. 10.7. The deposit, if any, is refundable to the customer on termination of the agreement, subject to sub-paragraph 10.4(c) and 10.5 above. A deposit shall be forfeited to the Municipality if it has not been claimed by the customer within 12 months of termination of the agreement. 10.8. Consumer deposits are to be paid for all separately metered services. 10.9. Deposits must be paid in cash or by cheque. Council will accept an irrevocable bank guarantee in cases where the deposit exceeds R 5 000.00. Such original bank guarantee has to be hand delivered during normal office hours to the applicable office. 10.10. No service deposit is required if a pre-payment meter is installed for the particular service. 11. METHODS FOR DETERMINING AMOUNTS DUE AND PAYABLE 11.1. The Municipality or its authorised agent must in respect of municipal services that can be metered, endeavour to, within available financial and human resources, meter all customer connections and/or read all metered customer connections, on a regular basis, subject to paragraph 11.2. 11.2. If a service is not measured and/or metered, the Municipality or its authorised agent may, notwithstanding paragraph 11.1, determine the amount due and payable by a customer, for municipal services supplied to him, her or it, by calculating a) the shared consumption; or if not possible; 16
b) the estimated consumption; or c) the average consumption. 11.3. If a service is metered, but it cannot be read due to financial and human resource constraints or circumstances out of the control of the Municipality or its authorised agent, and the customer is charged for an average consumption the account following the reading of the metered consumption must articulate the difference between the actual consumption and the average consumption, and the resulting credit or debit adjustment. 11.4. Where water supply services are provided through a communal water services network (standpipe), the amount due and payable by a customer gaining access to water supply services through that communal water services network, must be based on the shared or estimated consumption of water supplied to that water services network. 11.5. Where in the opinion of the Municipality or its authorised agent it is not reasonably possible or cost effective to meter all customer connections and/or read all metered customer connections within a determined area, the Municipal Council may, determine a basic tariff (flat rate), and/ or an availability charge, to be paid by all the customers within that area, irrespective of actual consumption. 11.6. The Municipality or its authorised agent must inform customers of the method for determining amounts due and payable in respect of municipal services provided which will apply in respect of their consumption or supply zones. 12. PAYMENT FOR MUNICIPAL SERVICES PROVIDED 12.1. A customer shall be responsible for payment of all municipal services consumed by him/her or it from the commencement date of the agreement until his/her or its account has been settled in full and the Municipality or its authorised agent must recover all applicable charges due to the Municipality. 12.2. If a customer uses municipal services for a use other than which it is provided by the Municipality or its authorised agent in terms of an agreement and as a consequence is charged at a charge lower than the applicable charge, the Municipality or its authorised agent may make an adjustment of the amount charged and recover the balance from the customer. 17
12.3. If amendments to the applicable charge become operative on a date between measurements for the purpose of rendering an account in respect of the applicable charges and the date of payment, - a) it shall be deemed that the same quantity of municipal services was provided in each period of twenty-four (24) hours during the interval between the measurements; and b) any fixed charge shall be calculated on a monthly basis in accordance with the charge that applied immediately before such amendment and such amended applicable charge. 13. CASH ALLOCATION 13.1. In accordance with section 102 of the Act, the Municipality may: a) consolidate any separate accounts of persons liable for payments to the Municipality; b) credit a payment by such a person against ANY account of that person; and c) implement any of the debt collection and credit control measures provided for in these By-laws in relation to any arrears on any of the accounts of such a person. 13.2. Any amounts paid may be appropriated to the oldest debt first. 13.3. Any amount paid by the customer in excess of an existing debt maybe held in credit for the customer in anticipation of future charges and fees for municipal services, and no interest will be payable on that amount. 13.4. The Municipality s allocation of payment is not negotiable and the customer may not choose which account to pay. 14. FULL AND FINAL SETTLEMENT OF AN ACCOUNT 14.1. Where an account is not settled in full, any lesser amount tendered and accepted shall not be deemed to be in final settlement of such an account. 14.2. Paragraph (14.1) shall prevail notwithstanding the fact that such lesser payment was tendered and/or accepted in full and final settlement, unless the Municipal Manager 18
or the manager of the Municipality s authorised agent made such acceptance in writing. 15. RESPONSIBILITY FOR AMOUNTS DUE AND PAYABLE Notwithstanding the provisions of any other sections of these By-laws, the owner of premises shall be liable for the payment of any amounts due and payable to the Municipality or its authorised representative in respect of the preceding two years, where the owner is not the customer and the Municipality or its authorised agent after taking reasonable measures to recover any amounts due and payable by the customer from the latter, could not recover such amounts. 16. DISHONOURED PAYMENTS AND DEFAULT ON PAYMENT 16.1. Where any payment made to the Municipality or its authorised agent by negotiable instrument is later dishonoured by the bank, the Municipality or its authorised agent a) may recover the average bank charges incurred relating to dishonoured negotiable instruments against the account of the customer; and b) shall regard such an event as default on payment. 16.2. In the event of any default on payment, the Municipality or its authorised agent, without limitation to any other rights or recourse available to the Municipality, may a) Levy interest on arrears at the prevailing prime interest rate or at a rate prescribed by the Municipal Council from time to time; and/or b) Limit or disconnect any Municipal Services provided to a customer; and/or c) Take the necessary legal action to recover any amounts due and outstanding, including legal costs as between attorney and client and collection commission. 17. INCENTIVE SCHEMES The Municipal Council may institute incentive schemes to encourage prompt payment and to reward customers that pay accounts on a regular and timeous basis. 18. PAY-POINTS AND APPROVED AGENTS 19
18.1. A customer may pay his/her or its account at pay-points, specified by the Municipality or its authorised agent from time to time, or at approved agents of the Municipality or its authorised agent. 18.2. The Municipality or its authorised agent must inform a customer of the location of specified pay-points and approved agents for payment of accounts. Part 4: Accounts 19. ACCOUNTS 19.1. Accounts will be rendered monthly to customers at the address last recorded with the Municipality or its authorised agent. The customer may receive more than one account for different municipal services if they are accounted for separately. In cases where the customer has no official municipal address, the Municipality will make the account available at the nearest pay point. In the case of any fixed charge no account will be send out by the Municipality. 19.2. Failure to receive or accept an account does not relieve a customer of the obligation to pay any amount due and payable. 19.3. The Municipality or its authorised agent must, if administratively possible, issue a duplicate account to a customer on request upon payment of a fee as prescribed in the Council s tariff of charges. 19.4. Accounts must be paid not later than the last date for payment specified in such account, which date will be at least 14 days after the date of the account. 19.5. If payment of an account is received after the date referred to in paragraph 19.4 above, a late payment charge or interest at a rate prescribed by the Municipal Council from time to time, must be paid by the customer to the Municipality. 19.6. Accounts will reflect at least a) the services rendered; b) the consumption of metered services or average, shared, estimated consumption, flat and or availability charge; c) the period stipulated in the account; 20
d) the applicable charges e) any subsidies; f) the amount due (excluding value added tax); g) value added tax; h) the adjustment, if any, to metered consumption which has been previously estimated; i) the arrears, if any; j) the interest payable on arrears, if any; k) the final date for payment; 20. CONSOLIDATED DEBT 20.1. If one account is rendered for more than one municipal service provided, the amount due and payable by a customer constitutes a consolidated debt, and any payment made by a customer of an amount less than the total amount due, will be allocated at the discretion of the Municipality between service debts. 20.2. If an account is rendered for only one municipal service provided, any payment made by a customer of an amount less than the total amount due, will be allocated at the discretion of the Municipality. 20.3. A customer may not elect how an account is to be settled if it is not settled in full or if there are arrears. 20.4. Any payment made by a customer of an amount less than the total amount due, will be allocated in reduction of the consolidated debt in the following order: a) Arrears b) Interest c) Sundries d) Additional deposit e) Collection charges on arrears f) Water 21
g) Sewerage. Part 5: Queries, complaints and appeals 21. QUERIES OR COMPLAINTS IN RESPECT OF AN ACCOUNT 21.1. A customer may lodge a query or complaint in respect of the accuracy of an amount due and payable in respect of a specific municipal service as reflected on the account rendered. 21.2. A query or complaint must be lodged with the Municipality or its authorised agent before the due date for payment of the account. 21.3. A query or complaint must be accompanied by the payment of the average of the last three month s accounts where history of the account is available or an estimated amount provided by the Municipality before payment due date until the matter is resolved. Failure to make such interim payment or payments will render the customer liable for limitation or disconnection of the Municipal Services provided. 21.4. The Municipality or its authorised agent will register the query or complaint. 21.5. The Municipality or its authorised agent a) shall investigate or cause the query or complaint to be investigated; and b) must inform the customer, in writing, of its finding within one month after the query or complaint was registered. 22. APPEALS AGAINST FINDING OF MUNICIPALITY OR ITS AUTHORISED AGENT IN RESPECT OF QUERIES OR COMPLAINTS 22.1. A customer may appeal in writing against a finding of the Municipality or its authorised agent made in terms of section 21 above. 22.2. An appeal in terms of paragraph 22.1 must be made in writing and lodged with the Municipality within 21 days after the customer became aware of the finding referred to in section 21 and must a) set out the reasons for the appeal; and 22
b) be accompanied by any security determined for the testing of a measuring device, if applicable. Part 6: Agreement for the payment of arrears 23. ACCOUNTS 30 DAYS IN ARREARS 23.1. Where an account rendered to a customer remains outstanding for more than 30 (thirty) days the Municipality or its authorised agent may issue a final demand for payment of arrears in respect of all debtor accounts reflecting an amount outstanding for more than 30 (thirty) days, the final demand must contain the following: a) The amount in arrears and any interest payable; b) That the customer can conclude an agreement with the Municipality for payment of the arrears in instalment; c) That if no such agreement is entered into within the stated period that specified municipal services will be restricted or disconnected and/or legal action against a customer for the recovery of the arrears will be instituted; d) The restriction will be based on the Free Basic Services policy of the Municipality, which is applicable at the time. 23.2. A customer will be liable for any administration fees, costs incurred in taking action for the recovery of arrears and any penalties, including the payment of a higher deposit, as may be determined by the Municipal Council from time to time. 24. AGREEMENTS AND ARRANGEMENTS WITH CONSUMERS IN ARREAR 24.1. The following agreements for the payment of arrears in instalments may be entered into: a) An acknowledgement of debt. b) A consent to judgement. c) An emolument attachment order. 24.2. The customer shall acknowledge that interest will be charged at the prescribed rate. 23
24.3. Customers with water arrears must agree to the conversion to a prepayment meter if and when implemented, the cost of which, and the arrears total, will be paid off by a) Adding it to the arrears account and repaying it over the agreed period. 24.4. The Municipality or its authorised agent must require a customer to pay at least its current account on entering into an agreement for the payment of arrears in instalments. 24.5. The Municipality reserves the right to raise the deposit requirement of debtors who seek arrangements. 25. ACKNOWLEDGEMENT OF DEBT 25.1. Only debtors with positive proof of identity or an authorized agent with a Power Of Attorney will be allowed to complete an Acknowledgement of Debt- Agreement. 25.2. An Acknowledgement of Debt-Agreement must contain all arrangements for paying off arrear accounts. One copy of the document will be handed to the customer and another filed at Council s Credit Management section. 25.3. A customer who has already been summoned by Councils attorneys may apply for credit facilities However, all legal costs already incurred will be for his/her account and an initial payment of at least half of the total resultant outstanding debt will be required. The customer must also sign an Acknowledgement of Debt- Agreement, which will include a provision for legal fees. 25.4. Failure to honour the acknowledgement of debt-agreement may lead to immediate blocking, disconnection or restriction of services without further notice, and the resumption of legal action. 25.5. In all instances where the customer in arrears is employed, Council may obtain a Garnishee Order or Emolument Attachment Order. 26. FAILURE TO HONOUR AGREEMENTS 26.1. If a customer fails to comply with an agreement for the payment of arrears in instalments, the total of all outstanding amounts, including the arrears, any interest thereon, administration fees, costs incurred in taking relevant action and penalties, including payment of a higher deposit, will be immediately due and payable, without further notice or correspondence and the Municipality or its authorised agent may 24
a) Restrict or disconnect the municipal services; b) institute legal action for the recovery of the arrears; and c) hand the customer s account over to a debt collector or an attorney for collection. 27. RE-CONNECTION OF SERVICES 27.1. Re-connection of services which were discontinued and/or the water services which were limited, shall not be restored until - a) the arrears, any interest thereon, administration fees, costs incurred in taking relevant action and any penalties, including payment of a higher deposit, are paid in full; or b) in addition to any payments referred to in sub-paragraph (a) the customer shall pay the standard re-connection fee as determined by the Municipality from time to time, prior to the re-connection of municipal services by the Municipality or its authorised agent. c) The debtor enters into a reasonable agreement subject to section 24. 27.2. Municipal services shall be restored within three (3) working days after a customer complied with the provisions of sub-paragraph (a), (b) and/or (c). 28. UTHUNGULU DISTRICT MUNICIPALITY STAFF AND COUNCILLORS IN ARREARS 28.1. Staff members a) Item 10 of Schedule 2 to the Act states that: - A staff member of the Municipality may not be in arrears to the Municipality for rates and service charges for a period longer than three (3) months and a Municipality may deduct any outstanding amounts from a staff member s salary after this period. b) The Municipality shall liaise with the relevant staff on repayment of their arrears. c) The staff member must sign an acknowledgement of debt in accordance with this Policy. 25
d) No special treatment shall be afforded to staff in arrears. 28.2. Councillors a) Item 12A of Schedule 1 to the Act states that: - A Councillor may not be in arrears to the Municipality for rates and service charges for a period longer than three months. b) The Municipal Manager shall liaise with the Mayor and issue the necessary salary deduction instruction where appropriate. 28.3. Where the staff or Councillor s arrears have arisen due to any other reason, such arrear must be paid within 3 months with interest. 28.4. Bonus payments and thirteenth cheques may be appropriated to the whole debt where suitable arrangements have not been made to pay off the debt. 28.5. On appointment to a higher post, employees who have signed an acknowledgment of debts shall increase their instalments on the payment agreement in accordance with their new salary increase. 28.6. All new employees to the Municipality may be required to sign Direct Debits for the services registered in their names. 29. CONSENT TO JUDGEMENT AND OFFERS TO SETTLE IN TERMS OF SECTION 58 OF THE MAGISTRATES COURT ACT 29.1. The Municipality may, at its discretion, enter into a consent to judgement and an admission of liability, with customers and owners in arrears with municipal service fees, surcharges on fees, and sundry charges. 29.2. Before any consent to judgment is concluded,all services must be consolidated on to one account (if not done previously) and a credit authority concluded for the full debt of all services where possible. 29.3. The customers current account must be paid in full, and maintained, for the duration of the agreement. 29.4. The owner of a property must consent in writing to consent to judgement and admission of liability with the Municipality and his tenant. 26
29.5. Re-connection and disconnection fees, where applicable, must be paid in full before any consent to judgement can be entered into. 29.6. By entering into a consent to judgement the debtor(s), and where applicable, the owner, acknowledge that failure to meet any instalment will result in prompt disconnection action being taken, without prejudice to any legal action that the Municipality may take to recover the arrears. 29.7. Consent to judgements negotiated on business accounts shall require: a) the agreement to be signed by a duly authorised Director / Member of the business; and b) personal sureties, to the value of the debt plus current accounts, or increased deposits; 29.8. A consent to judgement may not be granted where: a) arrears have arisen due to dishonoured cheques, direct debit reversals etc; b) instances of repeated meter tampering have been identified; or c) the services have been removed. 29.9. Where any debt has arisen as a result of the Municipality having applied an incorrect charge and / or tariff, or faulty meter, the customer may arrange to pay the debt over a maximum period at the discretion of the Chief Financial Officer and any interest or penalties may be waived. 29.10. Should any dispute arise with respect to the amount owing,the debtor will continue to make regular payments based on the average charges for the preceding three(3)months prior to the dispute, plus interest where applicable. 29.11. The consent to judgement shall be terminated if a debtor relocates from the property. The balance owing shall become immediately due and payable. 29.12. The monthly instalments on a consent to judgement are payable within twenty one(21)days from the date of the account notwithstanding any further extension of time printed on the face of the account. 29.13. A consent to judgement shall be cancelled upon application for a revenue clearance certificate on the property, and the whole debt shall become due, owing and payable, not withstanding any agreement to the contrary. 27
29.14. Where the consent to judgement is based on interim readings, the amounts on the credit authority will accordingly be adjusted once the actual readings are taken. 29.15. A consent to judgement is automatically cancelled when an award is made in favour of a tenderer. 29.16. A consent to judgement for staff and councillors would be in accordance with clause 27 hereto. 29.17. The customer who signs consent to judgement must, as far as possible, make payment to the Municipality via a Debit Order. 30. DEBT RECOVERY USING THE PRE- PAYMENT METERING SYSTEM 30.1. A property may at the discretion of the Municipality qualify for the pre payment meter retrofit and70/30 prepayment debt recovery facility if the arrears on such property remain unpaid for more than ninety (90) days. 30.2. The customer of a private residential property may apply for a pre-payment meter and qualify for the 70/30 pre-payment debt recovery facility,(at the discretion of the Municipality and within the Municipality s budget and resource availability) provided the following conditions are met: The charge for the prepayement meter shall be determined by the tariff policy. a) The account must be in arrears by not less than R500.00; b) The applicant / owner must not own any other immovable property; c) The customer, with the consent of the owner, must sign an Acknowledgement of Debt with the Municipality for any outstanding debt. d) The owner must complete a change over form at the Municipality changing from a conventional meter to a pre-paid meter ;and e) Certified copies of the Identity Documents of the owner and his / her spouse must be produced. 30.3. The services of customers on pre-paid meters, who tamper with their services, will be disconnected and any outstanding debt will become due and payable immediately. The services maybe reconnected on a 50/50 pre-payment debt recovery plan. In this regard to 70/30 payment basis will be replaced with the 50/50 plan. 28
30.4. Customers cannot belong to more than one scheme simultaneously. 30.5. Customers who supply false information will be disqualified.if the false information is discovered after the pre-payment system is installed, the benefits of the 70/30 principle will be cancelled and all arrears will become immediately due and payable. 30.6. The Municipality may deviate from the above criteria in exceptional and motivated circumstances, where the property is valued under R400 000.00 and is occupied by a pensioner, disabled or is a Child Headed Household. The authorized delegate of the Municipality may hear representations in accordance with the principles of administrative justice and determine the matter in accordance with such principles. 30.7. On special projects identified by the Municipality, the pre-paid meters may be zero costed. CHAPTER 3: BUSINESSES WHO TENDER TO THE MUNICIPALITY 31. PROCUREMENT POLICY AND TENDER CONDITIONS 31.1. The procurement policy and tender conditions may provide that a) when inviting tenders for the provision of services or delivery of goods, potential contractors may submit tenders subject to a condition that consideration and evaluation thereof will necessitate that the tenderer obtain from the Municipality a certificate stating that all relevant municipal accounts owing by the tenderer or its directors, owners or partners have been paid or that suitable arrangements (which include the right to set off in the event of non-compliance) have been made for payment of any arrears; b) reference to a municipal account shall include any municipal service charge, tax or other fees, fines and penalties, due in terms of a contract or approved tariff or rate, which is outstanding after the due date normally appearing on the consolidated account or overdue in terms of the contract or any other due date that has passed; and c) tender conditions contain a condition allowing the Municipality to deduct monies owing to the Municipality from contract payments in terms of a reasonable arrangement with the debtor. 29
CHAPTER 4: UNAUTHORISED SERVICES 32. UNAUTHORISED SERVICES 32.1. No person may gain access to municipal services unless it is in terms of an agreement entered into with the Municipality or its authorised agent for the rendering of those services. 32.2. The Municipality or its authorised agent may, irrespective of any other action it may take against such person, by written notice order a person who is using unauthorised services to a) apply for such services in terms of Chapter 2 Part 1; and/or b) undertake such work as may be necessary to ensure that the customer installation through which access was gained complies with the provisions of these or any other relevant bylaws. 32.3. If the customer does not comply with the written order of the Municipality or its authorised agent within 21 days, then the Municipality or its authorised agent may limit or disconnect any municipal services in addition to taking any other action available in terms of these By-laws, common law or other statutory provisions. 33. INTERFERENCE WITH INFRASTRUCTURE FOR THE PROVISION OF MUNICIPAL SERVICES 33.1. No person other than the Municipality or its authorised agent shall manage, operate or maintain infrastructure through which municipal services are provided. 33.2. No person other than the Municipality or its authorised agent shall effect a connection to infrastructure through which municipal services are provided. 34. OBSTRUCTION OF ACCESS TO INFRASTRUCTURE FOR THE PROVISION OF MUNICIPAL SERVICES 30
34.1. No person shall prevent or restrict physical access to infrastructure through which municipal services are provided. 34.2. If a person contravenes paragraph 34.1, the Municipality or its authorised agent may a) by written notice require such person to restore access at his/her own expense within a specified period; or b) if it is of the opinion that the situation is a matter of urgency, without prior notice restore access and recover the cost from such person. 35. ILLEGAL RE-CONNECTION 35.1. A person who unlawfully and intentionally or negligently reconnects to services or unlawfully and intentionally or negligently interferes with infrastructure through which municipal services are provided, after such customer's access to municipal services has been limited or disconnected, shall immediately be disconnected from all municipal services. 35.2. A person who re-connects to municipal services in the circumstances referred to in paragraph 35.1 shall be liable for the cost associated with any consumption, the cost of de- and/or re-connection and all other costs incurred by the Municipality or its authorised agent persuant to the customer's conduct, notwithstanding any other actions which may be taken against such a person. 35.3. The consumption will be estimated based on the average consumption of services to the specific area within which the unauthorised connection was made. 36. IMMEDIATE DISCONNECTION 36.1. The provision of municipal services may immediately be disconnected if any person a) unlawfully and intentionally or negligently interferes with infrastructure through which the Municipality or its authorised agent provides municipal services; b) fails to provide information or provides false information reasonably requested by the Municipality or its authorised agent and relevant to the rendering of municipal services. CHAPTER 5: OFFENCES 31